blanket approval for intercorporate loans and investments

(a) approving intercorporate investments and loans exceeding the net worth of
the company.
(b) blanket approval for intercorporate loans and investments.
The Circular also points out that companies have to specify the specific securities
in which it proposes to invest the amount. However, in case of guarantees, the resolution can indicate the amount annually.
4. Unanimous Approval of the Board. Sub-section (2) of Section 372-A disallows making of inter-corporate investment by the Board of Directors of a company unless the resolution sanctioning it is passed at a meeting of the Board with the consent of all the Directors present at the meeting.
5. Approval of the Public Financial Institution. Where any term loan is subsisting, the prior approval of the public financial institution (referred to in Section 4A) must be obtained. However, the prior approval of a public financial institution shall not be required where the aggregate of the loans, guarantees, etc., and investments so far made in all other ,bodies corporate alongwith the investments, loans, etc., proposed to be made does not exceed the aforesaid limit of 60 per cent. But, the approval of the public financial institution shall be necessary where the company has made a default in repayment of loan instalment or payment of interest thereon as per the terms and conditions of such loan to the public financial institution.
6. Default in Repayment of Deposits. Sub-section (4) of Section 372-A prohibits a company which has defaulted in complying with the provisions of Section 58A to, directly or indirectly, acquire by way of subscription, purchase or otherwise the securities of any other body corporate, till such default is subsisting.
7. Register of Investments [Section 372-A(5)]. Every company shall keep a register showing the following particulars with respect to its investments in other body corporate(s) :
(i) the name of the body corporate;
(ii) the amount, terms and purpose of the investment; and
(iii) the date on which investment was made.
The aforesaid particulars shall be entered chronologically in the Register within 7
days of the making of such investment.
The Register shall be kept at the registered office of the company and shall be open
to inspection.
Extracts may also be taken therefrom as well as copies thereof may be obtained by any member of the company to the same extent and in the same manner and on payment of the same fees as in the case of the register of members as per Section 163 [Section 372-A(6).]
In case of default, the company and every officer in default, shall be punishable with fine upto Rs. 5,000 and also with a further fine upto Rs. 500 for every day till the default continues [Section 372-A(10)].
8. Exemptions. Sub-section (3) and sub-section (8) of Sectio~ 372-A exempt:
(a) any investment made by:
(i) a banking company, or an insurance company, or a housing finance
company in the ordinary course of its business, or a company established